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C. Medicare Guidelines and Petitioner’s Expensing Policy
Petitioner was incorporated in 1982. Since then, petitioner
has expensed all capital items for which it paid less than $500.
Petitioner followed that practice in 1995 and 1996. Its
expensing policy complies with Medicare guidelines for the
capitalization of depreciable assets described above.
The following chart shows the number, total cost, and
average cost of office items petitioner bought in 1995 and 1996
which have an expected useful life of one year or longer and
which cost less than $500 (the disputed assets):
1995 1996
Number of office and computer
items costing less than
$500 each 2,632 2,381
Total cost of office and
computer items $467,944 $351,543
Average cost per item 177.79 147.65
Petitioner’s office items included bookcases, chairs,
credenzas, desks, organizers, file cabinets, hutches,
refrigerators, microwaves, serving carts, panels and accessories,
tables, telephones, and typewriters. Petitioner’s computer items
included modems, CD ROMs, hard drives, keyboards, motherboards,
memory modules, outlets, processors, servers, software, and
terminals.
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Last modified: May 25, 2011